Stock futures rose Tuesday, the first day of November, as Wall Street tried to build on last month’s sharp gains and looks ahead to a key Federal Reserve decision on rates.
Futures tied to the Dow Jones Industrial Average were up 197 points, or 0.6%. S&P 500 and Nasdaq 100 futures added 0.9% and 1.1%, respectively.
Some traders pointed to optimism from unconfirmed reports that China could be moving away from its Zero Covid policy as a source for Tuesday’s early gains.
“Stocks are trading very well following unconfirmed reports on social media overnight about China formulating a plan to exit its ‘zero tolerance’ approach to COVID,” wrote Adam Crisafulli of Vital Knowledge.
“While the consensus narrative has embraced the ‘Fed will slow its tightening pace’ narrative, China remains among the most hated markets on the planet w/its equity indices at multi-decade lows – there’s still a lot more room to rally on the upside in the coming quarters assuming a more realistic COVID approach is implemented,” he added.
Wall Street on Monday wrapped up a strong month of gains, with the Dow rallying nearly 14% for its biggest monthly advance since January 1976, as investors rotated out of technology and hedged hopes on stalwarts like banks. The S&P 500 and Nasdaq Composite added about 8% and 3.9%, respectively.
Earnings season continues Tuesday with Uber, Pfizer and Fox before the bell and Advanced Micro Devices and Airbnb after the close.
Tuesday also brings the start of the Fed’s November meeting, which many market participants expect to result in a 75 basis point interest rate hike. Many will look to the central bank’s statement and Fed Chair Jerome Powell’s question and answer segment for clues around policymakers’ battle against inflation.
Investors will also be watching for economic releases on Tuesday, including job openings data and construction spending for September, as well as the ISM manufacturing report for October.